Land use act, how to buy Landed properties in Nigeria

   

How difficult is the property purchase
process in Nigeria?
Foreigners can obtain leases from the
State agencies for a maximum of 99 years for the
use of land.
The Land Use Act of 1978 converted all
land to State Land. The Governor of that
State is responsible for the management
of this land on behalf of the people and the country.
Therefore, land cant be owned
privately. The Governor’s consent is
needed for the assignment of title to use,
occupy, and improve property with a
statutory certificate. This certificate does
not include rights to sell, give, or sub-let,
which requires further consent from the
State Governor.
A peculiarity about purchase of property
in Nigeria, particularly in Lagos, is the
Consent Fee. The logic is that the state
government is the owner of land and
therefore any change in ownership or
assignment, in case of a lease, should
have the consent of the Governor.
There is also a Capital Gains Tax levied
at 10% of the difference between the
sale price and the original acquisition
tax. This is assessed by the Ministry of
Finance which has its HQ in Abuja.
Before purchasing, it is important to
make sure that consent from the
Governor is obtained for the sale. No
land can be “sold” without this consent. Otherwise its considered illegal.
Sale of real estate, however, does not
involve actual selling and purchasing.
There is only the transfer of rights from
one person to another. This transaction
is usually called an ‘assignment’. The
seller assigns the rights to use and
occupy the land to the buyer. After the
transaction, the buyer applies for a new
(statutory) certificate under his name. In
this case, the seller acts as the assigner,
and the buyer is the assignee.
The buyer/assignee’s lawyer checks the
title and other documents presented by
the seller/assigner before continuing
with the transaction. It is better to be
safe, since there are several restrictions
and conditions that come with a title,
and the buyer has to make sure of what
s/he is getting. There are even instances
where the assigner is selling land that s/
he does not own.
Purchasing property in Nigeria is not
without risks – expropriation and others.
Two laws make land ownership
uncertain in Nigeria. Although these
laws have their counterpart in most
countries, it is the implementation that
really matters. The Petroleum Act of 1969
and Land Use Act of 1978 allow the
government to take over land under the
state’s right to eminent domain. The
compensation scheme covers only to the land
but not the land itself. The value is also
fixed to a government rate which was set
in the year the law was created. These
factors combined with corruption and
years of autocratic rule, mean that
uncompensated expropriation of
property is common.
Another problem is the
situation of the country. The country
still has border disputes with Cameroon
in the South. The field tracing and
provisional demarcation of interstate
borders between the 36 states is not yet
finished. The last time that a
topographical map of the country was
made was in 1957 and it was at a scale
of 1 : 250,000 [practically useless for
individual property owners]. There is
program to bring the scale down to 1 :
50,000.
Nevertheless, taking money out of the
country should not be a worry for
foreigners.

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